Understanding the difference between strata title, master title,and individual title

 Some of us may be unfamiliar with the many forms of land titles that come with the property we are purchasing. A land title, which can be a master title, strata title, or individual title, is a document that represents one’s ownership of property in Malaysia, and without it, you will not be able to sell, transfer, or use it as collateral.

There are three types of land titles in Malaysia: master title, individual title, and strata title.

Master Title

A master title is an ownership document issued during the construction and development stage of a property. It is usually registered under the name of the proprietor and/or developer.

Separate units under this development will then be divided and sold into individual titles or strata titles. The common areas and shared facilities such as playgrounds, swimming pools, and outdoor areas will remain under the master title.

Individual Title

An individual title is an ownership document issued for landed properties such as semi-D houses, terrace houses, and bungalows, just to name a few.

The duration of your ownership will depend on the type of land:

• If you own a freehold property, the individual title that holds the land and property belongs to you in perpetuity.
• If the property is leased, the individual title is yours depending on the duration of the lease. For example, if the lease specifies a term of 99 years, you must either return the land to the state government or pay a lease extension premium when the term expires.
• If it is a Bumi property, the individual title will depend on the terms of land (freehold or leasehold).

Strata Title

Strata property is defined as a development or scheme where the building or land is carved out into different lots or ‘parcels’.

High-rise residences such as flats, apartments, condominiums, and townhouses are typical strata properties. However, landed homes in gated and guarded (G&G) communities may also be included in this category. An example of the latter is Desa ParkCity in Kepong.

A strata title is a separate individual title issued to the owner of a unit in a high-rise structure in which each apartment, condo, or parcel will belong to you and other unit owners individually. However, common areas such as the swimming pool, gym, elevators, and lounge are shared areas and do not belong to any individual strata unit holder.

If you live in a strata property, you are obligated to pay sinking funds and maintenance fees. In the event that you fail to pay, the building administration has the right to enter your flat, auction your belongings, and take legal action against you. You will also lose your right to vote at the Annual General Meeting of the Management Corporation.

How Do You Obtain A Strata Title?

Under the Strata Titles Act 1985, developers are required to apply for the strata titles on behalf of the purchasers. When the strata title is issued, the person who owns the property can use the property like how it is used for an individual title.

Furthermore, the Strata Titles (Amendment) Act 2013, states that strata titles are to be issued upon vacant possession (VP) of the property. Therefore, homeowners can expect to receive their strata titles, along with keys and other ownership documents, the moment that they are informed that VP can be obtained from the developer.

How do you check the issuance of a strata title?

Homeowners can either call the local land office or conduct a quick search on the e-Tanah system using the master title details in their Sale and Purchase Agreement. However, as the strata title application process happens on the developer’s end, it is recommended to call the developer to ask if the developer has applied for the strata title and what stage it is at.

Why is it important to obtain a strata title?

For homeowners, it is important that they get, keep, and preserve the strata titles to their high-rise residential units. This is due to the following reasons:

• It serves as proof of your property ownership.
• It can be used as a dealing instrument for instances of charging to banks for loans.
• The issuance of the strata title will initiate the formation of the management corporation (MC) by the owners of the subdivided building to maintain and manage the building and to have their own bylaws, usage or restrictions.
• It serves as proof of the built-up area of your unit and the apportionment of your share in the total aggregate units. This enables the calculation of the maintenance fees by the Management Committee.
• Having a strata title can prevent complications should the developer come under liquidation or become insolvent.

What happens if you do not get your strata title?

The main ramification of any delay in the granting of the strata title is that, according to the master title, the land legally belongs to the developer (or the registered proprietor), and the homeowners only have beneficial ownership of their respective parcels.

Moreover, if the developer goes into liquidation or becomes insolvent before the strata titles are issued, the unit owners might go through the trouble of having to pay for the strata titles themselves.